Ripples were sent through the financial world when new figures revealed that tech titan Jeff Bezos had become one of America’s ten richest individuals. The reason some were taken aback was because of Bezos’s unorthodox approach to business and life. The company he founded and currently leads as CEO, Amazon, has earned a reputation with investors of earning massive revenues while racking up substantial expenditures, resulting in very slim profits or even losses. But the recent surge in Bezos’s wealth as well as the value of his company demonstrates a well-executed application of the underlying principles of Information Management Theory (IMT).
While many of Amazon’s partners and competitors have tried to emphasize the complexity and sophistication of their products and offerings, Amazon is unique in that it aggressively pursues simplicity. For instance, Amazon’s flagship device, the Kindle Fire tablet, is starting to gain traction in consumer markets because of its simplicity. This tablet runs Google’s Android operating system, but instead of providing compatibility with all of the quarter million Android applications available, the Fire limits users to downloading a pre-selected set of applications that are specially tailored for the device. Amazon follows the IMT by gaining expertise with a small set of Android applications and then making them perfectly compatible with its Kindle devices. As a result, the user is left with a powerful device that is incredibly simple to use—simplicity that arises because Amazon truly understands the applications it is working with. In contrast, many of Amazon’s competitors try to integrate as many Android apps as possible, resulting in an extremely complicated user interface that reveals the manufacturers’ cursory grasp of the applications they attempt to include.
In addition to emphasizing simplicity above all else, Jeff Bezos and Amazon relate to IMT because they do not attempt to influence others. For instance, Amazon has established a practice of attempting to gain market share in areas that initially seem unprofitable but eventually become highly lucrative. When Amazon first makes these substantial investments into a frontier area, it draws wide ridicule from investors and analysts. However, these investments quickly generate significant returns without Amazon having to exert influence over potential customers. When Amazon first became involved in cloud storage, it focused obsessively on driving down costs while maximizing system stability and reliability. With virtually no advertising or publicity, Amazon’s cloud storage services quickly became highly sought after, with prominent institutions such as Harvard Medical School and NASA’s Jet Propulsion Laboratory choosing Amazon’s storage solutions over more traditional alternatives. Amazon is able to gain market share and establish dominance without exerting influence. Instead, it simply attempts to develop an intricate understanding of the markets it enters and minimize risk by acquiring as much information as possible. When one looks for stellar applications of IMT, look no further than Amazon.